Harry:
> Ed, > > I'm not picking on you. Just that both of your posts invited comment. > > The lesson is that "People seek to satisfy their desires with the least > exertion." > > Your professor had it wrong. Erecting a tariff wall is not a "beggar my > neighbor". It's a beggar ourselves policy. I would agree that that was the ultimate effect, Harry, but what he was saying was that the intention was to keep foreign goods out and force people to buy domestic. If all countries were doing that, the net effect would be to freeze trade and beggar everybody, which is essentially what happened during the thirties. Out of this came things came things like Gatt and more recently the WTO. > > When you or I work, we try to get as much back as we can for as little work > as possible. (Translation - as high a wage as possible for as few hours as > possible.) > > So, it makes sense that the more imports (wages) we can get for as few > exports (exertion) as possible should be our sensible objective. So, every > country in the world should be trying to import as much as possible, while > exporting as little as possible. But you can't do that. Ultimately, things have to balance. During recent years, the US has been running large deficits on current account and large surpluses on capital account, thereby balancing things off by greatly increasing foreign investment in the US economy. Given the falling dollar, there could be some reversal in this - i.e. US goods and services could become cheaper, meaning more exports, but foreigners would be more reluctant to invest in the US. > Yet, we are persuaded the opposite. > > The things we produce, exchange, and receive as wages are material goods. > Introducing money seems completely to confuse common sense. As we get > "money" for exports but have to pay "money" for imports, it seems proper to > get lots of money from exports, while thriftily spending less on imports. > > Yet there isn't a member of this list who works for money. > > We work for bacon and eggs, shirts and shoes, and SUVs. Our wages are the > goods we get to keep us alive and make our existence tolerable. Money is no > more than a convenience to make trade more convenient. Yes, OK, it's a medium of exchange and a measure of value. But more and more it has become a thing of investment in itself. It's traded, with people betting that the currencies they purchase will increase in value and they will make a quick profit. Capital flows of this kind have led to considerable instability in international trade. > > So, when trading, the object for both sides is to get more value from the > transaction - which means more goods. Not when various types of paper or money itself are traded. > > I'd be happy to help Japan with its export problem by taking all the goods > they want to send me. I promise not to send them anything back so I won't > increase their imports. > > They can send them to me directly to the beach where I'll be lying on a > large towel being shaded from the hot sun by a geisha, while another gently > fans me. > > I'm also willing to help Japan's unemployment problem by taking two ladies > off their unemployment lines. Japan would, of course, pay their expenses, > which would still further increase their export figures. > > I'm basically just a good person. To that I say Amen! I can't go any further tonight. It's getting late and I've had a long day, ending with watching a rather funny, but far too long, high school play. So I'll take another look tomorrow. > I am ridiculing modern economics, but it lays itself open to ridicule. I > remember many years ago, noticing a peculiar thing in global statistics. > Total world merchandise imports were 5-10% larger than total world > merchandise exports. > > How can that be? If $1,000 dollars worth of goods are exported, how can > $1,100 arrive as imports at their arrival port? Do they pick up fish on the > way, or something? > > I'm not even sure they any longer use CIF (cargo, insurance, freight). They > may be using FOB (free on board) for everything. I'm out of touch. > > Anyway, the import statistics included the cost of getting goods there > (CIF). So, if two countries exported identical amounts to each other, each > would have a trade deficit with each other. It doesn't seem possible that > such a childish statistical error would be made but it was. > > One country acted differently - Canada. > > Canada's figures measured imports at the port of export, rather than at > their own port. Well that's sensible, so this reduced import figure > balanced their trade didn't it? > > Well, not quite. Canada didn't measure its exports at the port, but back > where things were produced in Alberta, or Saskatchewan. So, the cost (for > example) of transporting the grain from the prairies to the port wasn't > counted, thereby reducing the export figure. > > This allowed them to produce a deficit to view with alarm. > > "Those whom the Gods would destroy, they first make mad." > > Harry > ------------------------------------------- > > Ed wrote: > > >You may have a point, Keith. Tariffs are no longer in, so other means > >have to be used to reduce imports, boost exports, and get Americans to buy > >American. One of my long-ago economics profs called the competitive > >tariff raising games of the 1930s "beggar my neighbour > >policies". Increasingly making it more difficult for foreign producers to > >access the US market may be that kind of thing. > > > >As an aside, humerous but potentially dangerous, the prof had a habit of > >pounding the desk when he was making a point. One day, as he was pounding > >away at his most furious, a large section of the plaster on the ceiling > >came loose (because or workers on the roof) and rained down on the > >class. After that, he stopped pounding and started waving his arms in the > >air with equal ferocity. > > > >Ed Weick > > > > **************************************************** > Harry Pollard > Henry George School of Social Science of Los Angeles > Box 655 Tujunga CA 91042 > Tel: (818) 352-4141 -- Fax: (818) 353-2242 > http://home.attbi.com/~haledward > **************************************************** > > ---------------------------------------------------------------------------- ---- > > --- > Outgoing mail is certified Virus Free. > Checked by AVG anti-virus system (http://www.grisoft.com). > Version: 6.0.484 / Virus Database: 282 - Release Date: 5/27/2003 > _______________________________________________ Futurework mailing list [EMAIL PROTECTED] http://scribe.uwaterloo.ca/mailman/listinfo/futurework
